housing market projections 2022

What Will Happen with the Housing Market in 2022?

As we make our way through another crazy year for real estate, there’s one big question on everyone’s minds right now: will the 2022 housing market continue to follow the same trajectory, or are we facing a possible downturn?

In today’s market, the most powerful tool you have to beat your competition is knowledge.

So, let’s take a deep dive into the latest housing market projections for the rest of 2022 so you have the knowledge and confidence to educate your clients and crush your goals this year.

2022 Housing Market Predictions

The past year has been full of exciting and record-breaking moments. It’s also seen its fair share of buyer fatigue, hesitancy and confusion.

Here’s what industry experts anticipate for the rest of the 2022 housing market.

Will Home Prices Go Up or Down?

In the past 12 months, home price appreciation has been the topic of many headlines and not in a good way. Speculation that we’re in another housing bubble has kept many buyers and sellers hesitant that we’re headed for another crash.

So, what does the future hold for home prices?

It’s important to remember that the 2021 market was anything but normal, and that escalating home values were a direct result of record-low inventory.

However, experts project that the inventory situation should improve in the coming year, slowing price appreciation.

But will home prices depreciate in 2022? Over 100 industry experts don’t think so. Instead, they are projecting a more modest appreciation of 5.1% in the next 12 months compared to the nearly 20% rise seen on average in 2021.

What’s Going to Happen with Mortgage Rates?

In case you didn’t know, the past year saw the lowest mortgage rates in the history of real estate.

So, if you have clients who are waiting for those rates to come back down or go down more, they may be waiting a very long time.

While experts don’t project that mortgage rates will rise a large amount, any increase would mean an increase in monthly mortgage payments. That’s why pre-approval is such an important step for today’s homebuyers.

How To Approach Rising Mortgage Rates as a Buyer | Keeping Current Matters

A couple decimal points may not seem like a lot to most people, but it could make or break someone’s budget.

If you have buyers that are playing the waiting game, the best advice you can give to them is that a rise in mortgage rates coupled with continued home price appreciation only means one thing: paying more for the same house they’d buy now.

Will Housing Inventory Rise in 2022?

Inventory has been, without a doubt, the biggest player in the anything but ordinary real estate market we’ve experienced in the last two years.

With buyer fatigue running high, you’re probably getting asked, “Are there more homes coming to market in 2022”

The good news is, there are many factors that lead industry experts to anticipate a rise in homes for sale. If you look at the graph below, you’ll see the latest data shows more sellers are listing their homes for sale each month this year.

Are There More Homes Coming to the Market? | Keeping Current Matters

And according to realtor.com, this growth is expected to continue. Their research finds the majority of potential sellers plan to list their homes over the next six months. Realtor.com says:

“. . . markets may see a noticeable bump in the number of homes for sale as we move through spring and into summer. A majority of homeowners planning to sell this year indicated that they aim to list in the next six months, with almost 10% having already placed their properties on the market.”

While more inventory may take a bit of the edge off of today’s competitive market, it’s important to remind your clients that homes are also selling faster, with the time on market decreasing month-over-month. So, even with more homes coming on the market, buyers should expect to move quickly and prepare for a bidding war.

What Does this Mean for Buyers & Sellers for 2022?

There is still a lot of motivation for buyers and sellers in the market, and that’s not expected to change in the coming months.

With experts projecting a rise in inventory and mortgage rates remaining relatively low, both sides of the real estate transaction stand to benefit from making a move this year.

While today’s market might be changing, there’s still a lot of incentive for your clients to make a move. Waiting until next year could mean losing out on a less competitive market and better affordability: the two biggest factors positively impacting buyers and sellers today.

Bottom Line

If we’ve learned anything in the past couple of years, it’s that while we can project the future, we can’t predict it.

While industry experts don’t expect the 2022 housing market to be as crazy as 2020 or 2021, experts have already changed their earlier projections. That’s why it’s important to stay on top of the latest insights because there are so many factors that can alter the course of the industry.

Signing up for a 14-day free trial of the KCM Membership is the easiest way to stay on top of the latest real estate news and data. Have your personalized content sent directly to you so that you – and your clients – stay educated on what’s happening in housing. Sign up today.